Your Tax Dollars at Work in GMAC

WASHINGTON -- In America's ever-more-democratic society, egalitarianism seeps into everything, even the supposedly severe meritocracy of sport. So every 7-year-old who has soccer shoes laced up by a parent gets a trophy just for showing up, and almost every college football team that is not dreadful is "bowl eligible." That is why there are 34 bowl games, which is why you might not have noticed Tuesday's Bailout Bowl (Ball State vs. Tulsa, by the way), in which you could have seen your tax dollars at work. Or at play.

The game's real name was the GMAC Bowl. GMAC is known as the "financing affiliate" of General Motors. But Cerberus, the huge private equity firm that owns 80.1 percent of Chrysler, also owned 51 percent of GMAC until GMAC got the government to baptize it as a bank holding company. That transformation supposedly was necessary to make GMAC eligible for a place at the TARP (Troubled Asset Relief Program) trough -- although GM itself already has a place there, as does Chrysler. Anyway, the infusion of TARP dollars -- 6 billion of them -- diluted Cerberus' GMAC ownership to at most 33 percent, but that diminution seems a small price for Cerberus to pay for a second bite from the bailout apple.

Washington sternly said that it would allow GMAC to become a bank holding company only if GMAC managed to increase its capital to $30 billion. When GMAC fell far short of that goal, Washington supplied some of the shortfall.

Immediately after GMAC became eligible for TARP money, GM reduced to zero the interest rate -- for up to 60 months -- on certain models. This, of course, penalizes GM competitors, including Toyota, Honda and other "transplants" whose cars are made in America by Americans for Americans, and Ford, which does not have the freedom of maneuver conferred by TARP money because Ford is not taking any.

This redundant evidence that no good deed goes unpunished might be a reason for Ford to take some. Then it could join GM in using taxpayers' money to produce more troubled assets. The New York Times reports that GMAC has begun making loans to borrowers with credit scores as low as 621, a significant relaxation of the 700 minimum score the company adopted just three months ago as it struggled to survive. America's median credit score is 723. GMAC's lowered standards will increase the number of people eligible for its loans by an estimated 50 million.